Second-quarter figures from the Wenzhou branch of the People's Bank of China showed that 89 percent of local people and nearly 57 percent of enterprises had either borrowed from or made deposits at non-bank finance companies.
You would think China's larger banks would take this as an opportunity to develop a market for commercial paper. Lack of such a development illustrates the immaturity of fixed income trading in emerging markets. Investors drawn to emerging market bonds need to take heed.
I'll take this as a sign of an approaching top for China's own bubble.
Full disclosure; Long FXI with covered calls and cash-covered short puts.